'Significant weaknesses' identified in Cannock Chase Council audit

The authority’s leader has said work has already started to address the issues raised in the External Auditor’s Annual Report (AAR) for 2021/22 and 2022/23.

The report said the council needs to “urgently address its significant weaknesses” in complying with required Housing Revenue Account (HRA) obligations.

Actions include addressing breaches to statutory responsibilities concerning tenant health and safety and ensuring non-compliance is reported to the Regulator for Social Housing.

The council also needs to improve its financial planning and financial monitoring arrangements.

The report said: “The lack of financial planning and monitoring in both years meant the council could not deliver an efficient budget in 2021/22 or 2022/23 which impacted on its financial sustainability and on governance – as a result it also failed to meet statutory financial statement audit deadlines.”

Cabinet and Audit and Governance committee members will attend a joint meeting on Wednesday to discuss the report and the council’s response. A revised internal audit plan for 2023/24 will then be considered at an additional Audit and Governance Committee meeting.

The report to Wednesday’s joint meeting said: “The report has highlighted several significant issues relating to the council’s financial, governance and asset arrangements and made recommendations for addressing these.

"The AAR covers the years 2021/22 and 2022/23 and has identified several areas of concern; primarily the delay in preparation of and audit of final accounts and budget monitoring, the management of our HRA (Housing Revenue Account and corporate assets (and) weaknesses in our arrangements for our IT systems, fraud, procurement, performance management and managing our workforce.

“The External Auditors have acknowledged that there has been a lack of capacity in key service areas to address these issues.

"None of the issues themselves are new; they were identified in the previous AAR, have been raised in reports issued by Internal Audit and/or have been raised as significant governance issues in the Annual Governance Statement over the same period.

"However, the External Auditors have now raised the profile of these issues and the need to address them to prevent significant governance failings. Three statutory recommendations have been made and these are being progressed as a priority.

"The additional resources needed will be primarily focussed around finance and transformation and assurance. Provision for the additional resources has been included in the budget for 2024/25; £141,000 has been included for finance and £100,000 for transformation and assurance.

“This funding is to be matched proportionately by Stafford Borough Council as part of the shared services arrangements. The additional resources will be for both staffing and IT systems.

“Additional resources will also be required to address the HRA issues and the initial focus will be to commission an independent review – £35,000 has been set aside for this.

"Provision has been made in the budget for 2024/25 for undertaking the housing stock condition survey (circa £500,000) which is essential to the preparation of the 30 Year HRA Business Plan, and budget has been allocated to bring in additional management support to facilitate the delivery of the improvement plan.”

Council leader Tony Johnson added: “The priority for all councillors is the delivery of good services to the people of Cannock Chase District and the tenants of our council houses.

"We recognise the importance of the services we provide to our community and have already made a start in making them better.

“We have dedicated frontline staff who deliver important services to local people. We will invest in our staff and our IT systems to better support them in their work.

“We will also be investing in improvement works to our council houses. Councillors will be asked to agree a detailed improvement plan with timetabled actions at our next council meeting in February.”